10 Reasons Why Talking To Kids About Money Is More Important Than Ever
10 Reasons Why Talking To Kids About Money Is More Important Than Ever
By Gabrielle Olya
The coronavirus pandemic has disrupted many families' finances. Many parents have lost their jobs or have had their hours cut and are bringing in reduced earnings. Others might have lost money due to the stock market plummeting. These changes can obviously have an effect on their children, but money can be a difficult thing to talk to kids about. Even if you haven't felt adverse effects from the coronavirus pandemic personally, it's still a good time to have an honest conversation about money with your kids.
Here's why now is a good time to talk to your kids about money, plus how to have these important financial conversations.
It's Always a Good Idea To Talk To Kids About Money, No Matter the Circumstances
"First and foremost, I think it is a common mistake among parents to either wait until there are challenging financial times before they have the money talk with their children or never talk about money at all," said Kristina Morales, an MBA in banking and finance with more than 20 years of experience in commercial banking. "This is so important because it will help kids to better understand when parents need to make changes to their spending or lifestyle when difficult times arise. If they have no understanding or appreciation of where money comes from and how it works, they may have a very difficult time when times call for change or sacrifice."
Parents Now Have Time To Do It
"When financial literacy is not taught in schools and we have some important quality time available these days, it makes all the sense in the world to talk to your kids about something as important as finances and money," said Sandra D. Adams, CFP, partner at the Center for Financial Planning, Inc. in Southfield, Michigan.
Kids Will Be Seeing the Impact of Job Loss in Real Time
With parents losing jobs and assets, having open communication with your children about the new reality is important.
"This is a time when families are all together and when kids of all ages will have to see in real terms how the impact of job losses, job furloughs, asset losses and the need to cut back on expenses affect the entire family," Adams said. "The 'we are all in this together' motto here can make this a family affair, and they can be part of figuring out where the household can save on costs, cut back on expenses, etc. Lessons learned during these lean times will benefit children and parents alike, even when times get better and as children grow into adults."
Honesty Helps Children Become Comfortable With Talking About Money
Money is often seen as a taboo topic, but now is a good time to open up the lines of communication and encourage your kids to talk freely about financial matters.
"Right now are very tough times for so many families around the country, but it’s important to tell children about the circumstances that have occurred, be it a layoff or a reduction in pay or a loss in savings because of stock market trends," said Brent Weiss, CFP, chief evangelist at Facet Wealth. "Being honest helps children start to feel comfortable talking about money and learning about the importance of difficult decisions."
There Are Examples of Generosity and Good News Around Finances Now, Too
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